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USD/JPY Price Forecast: Yen languishes amid growing BoJ rate hike uncertainty

  • USD/JPY rises to near 159.45 as BoJ rate hike uncertainty weakens Japanese Yen.
  • The BoJ SoP of the April meeting showed that most policymakers expressed the need to raise interest rates in the near term.
  • Investors await the US NFP data for fresh cues on the Fed’s monetary policy outlook.

The USD/JPY pair trades 0.12% higher at around 159.45 during the early European trading session on Monday. The pair gains as the Japanese Yen (JPY) broadly underperforms amid uncertainty regarding whether the Bank of Japan (BoJ) will raise interest rates in the policy meeting on June 16.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the British Pound.

USDEURGBPJPYCADAUDNZDCHF
USD0.05%-0.10%0.13%0.07%-0.07%0.28%0.21%
EUR-0.05%-0.14%0.04%0.02%-0.07%0.24%0.14%
GBP0.10%0.14%0.19%0.15%0.02%0.38%0.27%
JPY-0.13%-0.04%-0.19%-0.03%-0.18%0.18%0.08%
CAD-0.07%-0.02%-0.15%0.03%-0.15%0.21%0.12%
AUD0.07%0.07%-0.02%0.18%0.15%0.30%0.25%
NZD-0.28%-0.24%-0.38%-0.18%-0.21%-0.30%-0.09%
CHF-0.21%-0.14%-0.27%-0.08%-0.12%-0.25%0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Higher oil prices due to the Middle East crisis-led energy supply shock have raised uncertainty over the Japan’s economic outlook.

Former BoJ Deputy Governor and current member of Japan’s Council on Economic and Fiscal Policy, Masazumi Wakatabe, said last week said in a meeting that it is important to understand whether the economy can withstand tighter monetary conditions, Reuters reported.

However, the BoJ Summary of Opinions (SoP) of the April policy meeting showed that a majority of policymakers supported an interest rate hike in the near term, while warning of high inflation risks.

Meanwhile, the US Dollar (USD) trades slightly higher at the start of the United States (US) Nonfarm Payrolls (NFP) data week. Investors will closely monitor the data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. In Monday’s session, investors will focus on the US ISM Manufacturing PMI data for May, which will be published at 14:00 GMT.

USD/JPY technical analysis

USD/JPY trades higher at around 159.45 at press time. The pair maintains a bullish near-term bias as spot holds above the 20-day Exponential Moving Average (EMA) at 158.84, keeping the recent uptrend structure intact.

The Relative Strength Index (RSI) around 58 stays in positive territory without yet signaling overbought conditions, which suggests buyers still retain the initiative while upside momentum is steady rather than stretched.

On the downside, initial support is located at the 20-day EMA near 158.84, where a daily close below would hint at a deeper corrective phase and expose lower levels on the chart towards 158.00. On the upside, the pair could advance towards an almost two-year high of 160.73 if it manages to decisively break above the May 28 high at 159.65.

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EUR/JPY Price Forecast: Edges lower from upper descending channel top around 186.00

  • EUR/JPY may retest the upper boundary of the descending channel around 186.00.
  • The 14-day Relative Strength Index of 57 suggests upward momentum should persist.
  • The primary support appears at the nine-day EMA at 185.33.

EUR/JPY steadies after six days of gains, trading around 185.70 during the Asian hours on Monday. The currency cross is maintaining a constructive bullish bias as it holds above both the nine-day and 50-day Exponential Moving Averages (EMAs).

The alignment of price over short- and medium-term moving averages hints at sustained underlying demand, while the 14-day Relative Strength Index (RSI) around 57 stays in positive territory without yet signaling overbought conditions, suggesting upside pressure could persist as long as these floors remain intact.

The technical analysis of the daily chart suggests the EUR/JPY cross is positioned near the upper boundary of the descending channel pattern around 186.00. The sustained break above the channel would indicate bullish confirmation. Further advance would support the EUR/JPY cross to explore the region around the all-time high of 187.95, recorded on April 17.

On the downside, the primary support lies at the nine-day EMA at 185.33, followed by the 50-day EMA of 184.98. A break below moving averages would revive the bearish bias and put downward pressure on the EUR/JPY cross to navigate the region around the three-month low of 181.87, recorded on March 16, followed by nearly six-month low of 180.81, reached on February 12.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the British Pound.

USDEURGBPJPYCADAUDNZDCHF
USD0.10%-0.04%0.13%0.08%-0.02%0.31%0.28%
EUR-0.10%-0.12%0.00%-0.02%-0.07%0.23%0.16%
GBP0.04%0.12%0.15%0.10%-0.02%0.33%0.27%
JPY-0.13%0.00%-0.15%-0.03%-0.13%0.21%0.14%
CAD-0.08%0.02%-0.10%0.03%-0.11%0.23%0.18%
AUD0.02%0.07%0.02%0.13%0.11%0.28%0.27%
NZD-0.31%-0.23%-0.33%-0.21%-0.23%-0.28%-0.05%
CHF-0.28%-0.16%-0.27%-0.14%-0.18%-0.27%0.05%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

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Yen Stays Weak Near Key Intervention Threshold

The Japanese yen traded around 159.5 per dollar on Monday, remaining under pressure and hovering near the closely watched 160 level that previously triggered official intervention to support the currency. Data released on Friday showed that Japanese authorities spent ¥11.7 trillion intervening in foreign exchange markets in late April, confirming widespread market speculations. On the policy front, investors remain divided over whether the Bank of Japan will deliver another interest rate hike this month, as policymakers weigh growing uncertainties linked to tensions in the Middle East. Market participants are now awaiting remarks from BOJ Governor Kazuo Ueda later this week for further insight into the central bank’s policy outlook. Meanwhile, Japan’s capital spending was unchanged in the first quarter compared with a year earlier, pointing to a slowdown in corporate investment and raising concerns about the strength of domestic economic momentum.

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USD/JPY Price Sees more upside towards 160.70

  • USD/JPY edges up to near 159.32 as the Japanese Yen trades with caution.
  • Tokyo CPI ex. Fresh Food grew at a moderate pace of 1.3% YoY in May.
  • Japan’s FM Katayama warned that authorities could intervene in the forex market to counter excessive volatility.

The USD/JPY pair trades marginally higher to near 159.32 during the Asian trading session on Friday. The pair edges up as the Japanese Yen (JPY) trades cautiously, following the release of the Tokyo Consumer Price Index (CPI) data for May and verbal intervention warning from Japan’s Finance Minister (FM) Satsuki Katayama.

Tokyo’s CPI ex. Fresh Food, which is closely tracked by Bank of Japan (BoJ) officials, arrived lower at 1.3% Year-on-Year (YoY), lower than estimates and the previous reading of 1.5%. The CPI data ex. Fresh Food stayed below the BoJ’s 2% target for a fourth straight month as fuel and education subsidies offset rising raw material costs from the U.S.-Israeli war on Iran, Reuters reports.

Meanwhile, Japan’s FM Katayama warned that authorities could intervene in the foreign exchange (Forex) market to counter excessive volatility against the Japanese Yen.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades slightly higher to near 99.00, but is close to Thursday’s low, which is 98.95.

On Thursday, the US Dollar faced a sharp selling pressure after media reports that a deal between the United States (US) and Iran has been prepared and only needs approval from President Donald Trump.

USD/JPY technical analysis

USD/JPY ticks higher at around 159.32 in the Asian trade. The pair holds a constructive bullish bias as spot remains above the 20-day exponential moving average (EMA) at 158.78, keeping the short-term trend underpinned despite recent volatility.

The Relative Strength Index (RSI) near 56 suggests moderate upside momentum rather than overbought conditions, allowing room for further gains while price stays supported above the EMA.

On the downside, immediate support is seen at the 20-day EMA around 158.78, where buyers are likely to defend the short-term uptrend; a decisive break below this area would expose a deeper corrective move towards the May 6 high at 157.94. Looking up, the pair aims to revisit an almost two-year high at 160.74

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EUR/JPY Price Forecast: Loses momentum to near 185.00, but bias stays bullish

  • EUR/JPY weakens to around 185.10 in Thursday’s early European session. 
  • The cross keeps the bullish vibe, but further consolidation cannot be ruled out in near term with neutral RSI momentum. 
  • The immediate resistance to watch is 185.65; the initial support level is seen at 184.70. 

The EUR/JPY cross loses momentum to near 185.10 during the early European session on Thursday. Escalations in the US-Iran conflict boost the safe-haven currency, such as the Japanese Yen (JPY) and act as a headwind for the cross. 

CNN reported on Thursday that Iran’s Islamic Revolutionary Guard Corps (IRGC) launched an attack targeting an American air base, which they said was the source of US strikes on Iranian targets hours before. The US strikes targeted Iranian drones and a launch site near the Strait of Hormuz. 

Traders will keep an eye on the Tokyo May Consumer Price Index (CPI) inflation report, which is due later on Friday. In case of a softer-than-expected Tokyo CPI print, this could drag the Japanese Yen lower against the Euro (EUR) in the near term. 

Chart Analysis EUR/JPY

Technical Analysis:

In the daily chart, EUR/JPY holds a mild bullish bias as it trades above the 100-day simple moving average and the Bollinger Bands middle line near 184.71, keeping the broader uptrend underpinned. The Relative Strength Index (RSI) hovers around 50, suggesting consolidative but still slightly constructive momentum while price drifts toward the upper Bollinger band.

On the topside, the immediate resistance is the Bollinger upper band around 185.65, and a clear break above this ceiling would open the way for a renewed extension of the advance. On the downside, initial support is seen at the Bollinger middle band near 184.70 and the 100-day SMA at 184.40, with the lower Bollinger band near 183.78 acting as a deeper cushion if a corrective pullback develops.

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Japanese Yen hits four-week low vs firmer USD as Hormuz risks counter intervention fears

  • USD/JPY attracts buyers for the third straight day, though JPY intervention fears cap gains.
  • Economic concerns stemming from Hormuz risk undermine the JPY and support spot prices.
  • Mideast tensions and Fed rate hike bets benefit the USD ahead of the crucial US macro data.

The USD/JPY pair trades with a positive bias for the third straight day and touches a four-week high, around the 159.60 region, during the Asian session on Thursday. The Japanese Yen (JPY) continues with its relative underperformance amid economic concerns stemming from the ongoing Middle East conflict. This, along with a broadly firmer US Dollar (USD), acts as a tailwind for spot prices, though intervention fears might cap further gains ahead of important US macro releases.

Investors remain worried that Japan’s economy will come under substantial strain due to the continued disruption to energy supplies through the Strait of Hormuz. In fact, shipping traffic through the strategic waterway has drastically reduced since the start of the Middle East conflict due to Iran’s restrictions on movements and the US naval blockade of Iranian ports. Adding to this, renewed US strikes on Iran raise the risk of a further escalation of tensions in the region, which continues to undermine the JPY and supports the USD/JPY pair.

A US official told Reuters that the US military carried out fresh strikes in Iran on Wednesday, targeting a military site that posed a threat to American forces and commercial maritime traffic in the Strait of Hormuz. The US official also said American forces intercepted and shot down multiple Iranian drones that posed a similar threat. Moreover, US President Donald Trump said that he is not satisfied with the terms negotiated with Iran and that he won’t be rushed into a deal, dampening hopes for a diplomatic solution to end a three-month-old war.

The latest developments, in turn, underpin the Greenback’s reserve currency status amid bets that the US Federal Reserve (Fed) will hike interest rates in 2026 amid inflationary concerns and further supports the USD/JPY pair. The JPY bears, however, seem hesitant amid speculations that Japanese authorities will step in again to prop up the domestic currency. Furthermore, traders might opt to move to the sidelines ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index and the Preliminary US GDP report later today.

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Japanese Yen hits one-month lows against US Dollar, boosting intervention risks

  • USD/JPY extends gains on Wednesday and reaches one-month highs right below 159.50.
  • BoJ Governor Ueda warned about second-round effects from inflation.
  • Investors will be looking at Tokyo CPI data later this week, to confirm a rate hike in June.

The Japanese Yen (JPY) keeps drifting lower against the US Dollar (USD) on Wednesday. The USD/JPY pair ticks higher for the fourth consecutive day, reaching fresh one-month highs at 159.45, and nearing the key 160.00 level, considered the limit of tolerable Yen weakness for Japanese authorities.

The market has ignored hawkish comments by Bank of Japan (BoJ) Governor Kazuo Ueda, who expressed his concerns about the second-round effects of inflation if the energy shock threatens wages, expectations, and price-setting behaviour.

These comments support the view that the central bank will raise interest rates at its June 15 meeting. The positive impact on the Yen, however, has been offset by investors’ concerns about the Japanese economy’s exposure to high Crude prices and the relatively lower Japanese Government Bond (JGB) yields.

Markets will be attentive to a string of Japanese macroeconomic data on Friday, with particular interest in the Tokyo Consumer Prices Index figures, to confirm June’s BoJ decision. Core inflation figures are expected to have remained growing at a steady pace in May, while the Unemployment Rate is seen unchanged, and retail sales are expected to have eased in April.

The US Dollar, on the other hand, remains supported by the hawkish repricing of the Federal Reserve’s stance. Recent data has eased concerns about the US labour market, prompting investors to ramp up bets of an interest rate hike before the year’s end. US Personal Consumption Expenditures (PCE) Price Index figures, due on Thursday, will be carefully analysed to contrast these views and are likely to set the US Dollar’s near-term direction.

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Euro hits fresh monthly highs with Japanese Yen weakness raising intervention concerns

  • EUR/JPY rallies for the fourth consecutive day and hits fresh monthly highs above 185.46.
  • BoJ Ueda’s comments backing an upcoming rate hike have failed to support the Yen.
  • In Europe, ECB policymakers have endorsed hopes of a tightening move in June.

The Euro (EUR) extends its rally against the Japanese Yen (JPY) for the fourth consecutive day on Wednesday, reaching above 185.46 for the first time since an alleged intervention on April 30. The JPY has failed to draw support from Bank of Japan Governor (BoJ) Ueda’s hawkish comments and is dropping against its main peers, raising concerns of another intervention. 

Ueda warned about second-round effects from inflation on Wednesday and stated that central banks should not look at Oil prices in isolation, because a temporary energy shock “may turn lasting if it alters wages, expectations and price-setting behaviour.”

These comments feed expectations that the BoJ will tighten its monetary policy at its June 15 meeting. The positive impact on the Yen, however, was minimal, with investors’ concerns about the Japanese economy’s exposure to high Crude prices and the comparatively low yield of Japanese Government Bonds (JGB) undermining speculative demand for the Yen.

In the Eurozone, recent comments from European Central Bank (ECB) policymakers strengthened the case for a rate hike in June and provided support for the Euro. ECB Board member Isabel Schnabel said on Tuesday that “looking through the inflation spike is no longer an option” and that a June rate will be needed.  Also on Tuesday, ECB Chief Economist Philip Lane showed comfortable when asked about market speculation about an upcoming rate hike at an interview with Nikkei.